Auto, Homeowners, Medical and Life Insurance Dollars and Sense.

Auto, Homeowners, Medical and Life

InsuranceDollars and Sense

Copyright

Copyright © Texas Education Agency, 2014. All rights reserved.

Copyright © Texas Education Agency, 2014. These Materials are copyrighted © and trademarked ™ as the property of the Texas Education Agency (TEA) and may not be reproduced without the express written permission of TEA, except under the following conditions:

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What is Insurance?

Copyright © Texas Education Agency, 2014. All rights reserved. 3

Terms to Know

Appraisal

Asset

Beneficiary

Cash value

Co-pay

Death benefit

Deductible

Estate

Face amount

Group insurance

Open-enrollment period

Premium

Supplemental insurance


Why is Insurance Needed?


Auto Insurance


Auto InsuranceTypes of Insurance Available Collision Coverage Comprehensive Coverage Liability Coverage Medical Payments Coverage Personal Injury Protection Rental Reimbursement Coverage Towing and Labor Coverage Uninsured Motorist


What Does Collision Coverage Pay?

Pays the cost of repairing or replacing your car after an accident regardless of who was driving or who was at fault

Payment is limited to cash value of car minus your deductible


What does Comprehensive Insurance Pay?

It pays damage to a car caused by fire, vandalism, hail or other events besides collision.


What Does Liability Pay?

Texas law requires 30/60/25 Liability protects you from

lawsuits and pays other people’s expenses caused by accidents. Medical / funeral Car repair or replacement Rental car during repair Punitive damages Attorney fees


What Does Personal Injury Protection (PIP) Cover?

Medical payments or funeral expenses for you, your family members and passengers in the car

80% of lost income and cost of hiring a caregiver


Rental Reimbursement and Towing and Labor Coverage

Rental reimbursement pays a set amount for a rental car while your cr is repaired or for a specific time if it is stolen.


What Does Uninsured Motorist Pay?

Bodily injuryProperty damageCovers you, your family

members and passengers in your car, as well as others driving your car with permission


Factors That Affect Auto Insurance Rates Type and level of coverage needed

Age and driving experience

Gender

Model of the car

Where you live

Vehicle use

Driving record, grades and insurance history


Ways to Lower Your Premium Bundle auto and homeowners policies with the same

company

Buy a vehicle that is not a target for theft

Ask for a higher deductible

Decrease your liability coverage

Have features such as airbags, anti-lock brakes and anti-theft devices

Place teens as occasional drivers on your least expensive car


Homeowners Insurance


Homeowners Insurance

Homeowners insurance - covers the home and the contents of the home

Property coverage

Liability coverage

Appraisal

Renters insurance


Factors That Affect the Cost of Home Insurance Type and amount of coverage

Size of the deductible

Risk factor where you live

The insurance company

Opportunity for discounts


Medical Insurance


The Importance of Medical Insurance

Medical insurance provides payment to cover financial loss as a result of illness or injury.

Medical care is expensive, so adequate health insurance is an important component of your financial plan.


Sources of Medical Insurance Two Government Programs

Medicare for individuals over 65 years of age or disabled individuals who qualify for social security

Medicaid-for low-income individuals that covers blind, disabled and needy families with dependent children

Employer-provided insurance where there is a group plan and the employer covers some or most of the cost

Private insurance where a person purchases health insurance through a private company


Indemnity Plans versus Managed Care Indemnity plans

allow participants to seek health care from any qualified medical provider

Managed care plans limit participants to a specific list of providers


Family Coverage The person who buys

the policy or subscribes to it through an employer is known as the policyholder.

Children become ineligible when they reach a certain age.


Group Plans

Group plans cover a large group of individuals, such as all the employees of a particular company or local government.

Within a group, individuals’risk is spread across the entire pool of members.


Location Restrictions

Some insurance companies will only provide medical care in the United States.

You may want to purchase travel insurance if you travel outside the United States.


Pre-existing Conditions

Insurance policies may exclude coverage for pre-existing conditions or health conditions that existed before the policy was granted.


Deductibles Many policies limit the total amount they will

pay for some procedures

Some companies cover only certain drugs or provide partial payment for unapproved drugs

Many policies have a co-pay, where the policyholder pays a set amount for a doctor visit or emergency room visit


Provider Networks Two most common

networks Health

Maintenance Organizations (HMO’s)

Preferred Provider Organizations (PPO’s)


Both HMO’s and PPO’s provide a list of providers. HMO’s usually provide a more limited list.

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Comparison of Insurance Plans

Type of Health Plan Premium Selection of Physician

Indemnity Plan High Flexibility to select a physician or specialist

Managed CareHMO

Relatively low Primary care physician refers the patient to specialist

Managed CarePPO

Low, but usually higher than HMO

Greater number of physicians to choose from with PPO’s than HMO’s


When You Leave a Job

Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue health insurance coverage for up to 18 months after your employment ends.


Disability Insurance

The ability to earn a living is one of your most valuable assets. Disability insurance covers your wages if you are in an accident or too ill to work for an extended period of time.


Life Insurance


Life Insurance Life insurance provides payment to a

specific person when the policyholder dies. This person is known as the beneficiary. Whole life insurance can build up savings

for the policyholder over time and the policyholder may borrow from the “cash value” of the policy

Term insurance provides insurance over a specified period of time.

Universal life insurance is a combination of term and whole life, giving the policy more flexibility.


Term Life Insurance

Provides protection only for a specific period of time


Whole Life Insurance

Provides basic lifetime protection so long as premiums are paid


Questions?


References and ResourcesImages:

Microsoft Clip Art: Used with permission from Microsoft.

Textbooks:

Ross Lowe, 2006. Consumer education & economics, student edition. 6 Edition. Glencoe/McGraw-Hill

Madura, Jeff, Mike Casey, and Sherry J. Roberts. Personal financial literacy. Boston: Pearson, 2010. 23-29. Print.

Websites:

All Insurance Information Organization. Great site for general insurance information.

http://allinsuranceinfo.org/

Federal Trade Commission

Filing for Bankruptcy: What you should know.

http://www.consumer.ftc.gov/articles/0224-filing-bankruptcy-what-know

Insurance 411 Organization

Web tool to make a credit card size insurance information card to carry in your wallet.

http://insurance-411.org/


References and ResourcesMoney MattersFinancial Education Curriculum produced by First Command Educational Foundation, 2010.http://www.fcef.com

NEFE High School Financial Planning Program National Endowment for Financial Education.http://www.hsfpp.org/

Privacy Rights Clearing HouseInformation on record Keeping.https://www.privacyrights.org/fs12a-personal-data-retention-and-destruction-plan#whykeep

Record Keeping and Personal Care GuideCreate personal records for the family.http://ddc.ohio.gov/Pub/RecordGuide.pdf

Texas Department of InsuranceConsumer information guide for purchasing insurance.http://www.tdi.texas.gov/pubs/consumer/cb088.html

Texas Financial Responsibility ReportInformation on Texas law concerning auto insurance.http://www.tdi.texas.gov/pubs/consumer/cb088.html

United States CourtsInformation on Bankruptcy.http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics.aspx


http://www.fcef.com/

http://www.fcef.com/

http://www.hsfpp.org/

http://www.hsfpp.org/

https://www.privacyrights.org/fs12a-personal-data-retention-and-destruction-plan#whykeep

https://www.privacyrights.org/fs12a-personal-data-retention-and-destruction-plan#whykeep

http://ddc.ohio.gov/Pub/RecordGuide.pdf

http://ddc.ohio.gov/Pub/RecordGuide.pdf

http://www.tdi.texas.gov/pubs/consumer/cb088.html




http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics.aspx

http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics.aspx

Auto, Homeowners, Medical and Life Insurance Dollars and Sense.

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